Benevolent Mediation in the Shadow of Conflict

Andrea Canidio and Joan Esteban ()

No 1027, Working Papers from Barcelona School of Economics

Abstract: We propose a novel arbitration procedure. This procedure allows a completely uninformed arbitrator to efficiently settle a dispute between two fully informed players. The novelty is that we allow the players to make wasteful, pre-negotiation investments aimed at manipulating the outcome of the arbitration. Our arbitration procedure is such that these investments are minimized. The core of the arbitration procedure is a "concession game" in which the third party shares the available peace dividend as a function of the concessions made by each player. The concession game can be used to eliminate offensive investments, that is, investments that make the conflict occurring in case no agreement is reached more destructive.

Keywords: conflict; bargaining; arbitration; concessions (search for similar items in EconPapers)
JEL-codes: F51 J52 (search for similar items in EconPapers)
Date: 2018-03
New Economics Papers: this item is included in nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1027

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